SAIC's Q4 2025 Earnings Call: Contradictions in Defense Focus, Fixed-Price Contracts, and Civilian Strategy

These are the key contradictions discussed in Science Applications International Corporation's latest 2025Q4 earnings call, specifically including: Strategic focus on defense and intelligence versus civil work, impact of shift to fixed-price contracts, submissions and bid strategy, and civilian market strategy:



Revenue Growth and Program Wins:
- SAIC reported fourth quarter revenue of $1.84 billion, an increase of 6% year-over-year, driven by new program wins and on-contract growth.
- Full-year fiscal year '25 revenue was $7.48 billion, representing 3.1% organic growth.
- The growth was attributed to successful new program wins and effective on-contract growth strategies.

Backlog and Submitted Bids:
- SAIC submitted bids totaling $28 billion in fiscal year 2025, well ahead of their initial plan of $22 billion.
- Over half of their backlog of submitted bids is expected to be awarded over the next two quarters to three quarters.
- The increase in submitted bids is due to a more efficient business development function and a focus on strategy and accretive bids.

Financial Guidance and Margin Improvement:
- SAIC guided revenues to a range of $7.6 billion to $7.75 billion for fiscal year 2026, representing approximately 3% organic growth.
- The guidance assumes a two point headwind from recompete losses and a $200 million headwind from low-margin Air Force Cloud One revenue.
- The focus on strong program performance, internal process efficiencies, and marginal improvement in submissions is expected to drive margin improvements.

Fixed-Price Contracting Transition:
- SAIC is examining the potential to migrate a significant portion of its cost-plus contracts to fixed-price types, assuming well-defined scopes of work and carve-out opportunities.
- The company is focusing on clear service level agreements and customer relationships to facilitate this transition.
- The goal is to enhance margins while maintaining cost control and customer satisfaction.